Identity fraud attempts double as Bitcoin price surges

New data from Onfido reveals a 2 times year-on-year increase in identity fraud attempts in February 2021 in tandem with the 5X year-on-year surge in Bitcoin’s price.

Over the past 12 months, the pandemic has driven a surge in fraudsters, with the recent Onfido Identity Fraud report revealing identity fraud increased 41% over the previous year. The crypto market has emerged as a regular target.

This highlights the need for vigilant identity verification solutions that detect and prevent attacks and scale with demand, using a combination of AI and identity experts to enable timely access to legitimate customers who wish to invest and trade securely in the crypto market.

Dimitrie Dorgan, Senior Document Specialist at Onfido, said: “The pandemic has led to a significant rise in unsophisticated identity fraud as first-timers look to take advantage of unsuspecting victims using digital services from home. Digitally native, the crypto market is a natural target. With the surge in Bitcoin price, some investors are becoming millionaires overnight, making crypto increasingly attractive for first-time fraudsters. It is critical that crypto trading platforms have strong customer identity and authentication techniques in place–allowing legitimate users to trade freely without fear of falling victim to bad actors or enabling fraudsters to impersonate genuine users.”

A 2020 study by crypto intelligence firm CipherTrace found that over half of the world’s cryptocurrency exchanges have weak or deficient customer identification and Know Your Customer (KYC) processes in place. As the market continues to rise in popularity with retail investors, it’s imperative that trading and management platforms protect their users with robust KYC and anti-money laundering processes.

Onfido supports a number of the largest global cryptocurrency marketplaces by strengthening their KYC processes and enabling a secure environment for trading, without hampering the user experience for digital coin traders. With Onfido Identity Verification, users take a photo of their legal ID and a selfie or live video, which then conducts AI-powered document analysis and biometric authentication to confirm the person presenting the identity is its legitimate owner and is physically present.

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